Dear Students and Readers,
Given the volume of inquiries I have been receiving from readers and students regarding the coronavirus and recent market volatility, I am compelled to share my views on the situation, both from a trading and investment standpoint and from a personal standpoint. I don’t think so.
We have created this article in question and answer format to best address the many comments and concerns we have received over the past few weeks.
Q: Will LTTTM’s business or services be interrupted by the coronavirus situation?
A:
I am self-isolating at home with my family and avoiding contact with the outside world. The rest of the LTTTM team is also working from home. I have a contingency plan in place to continue the LTTTM service in the unlikely event that I or a member of her team becomes ill. The show has been going on since it started in 2008.
Q: What are your thoughts on the overall coronavirus situation and what am I doing?
A:
As I write, the US stock market crashed about 13% overnight. This is his worst drop since the 1987 crash. The market is down about 30% so far this year. This was the most volatile price action I have seen in many years of trading.
Whether or not you believe the virus pandemic will turn out to be what experts predict, it’s now almost a self-fulfilling market crash. Confusion among traders and investors, rather than facts and evidence, is starting to influence these volatile movements. Unfortunately, now that the market has caused this level of technological damage, this turmoil may continue for some time until the world begins to show clear signs of coming out of this viral and economic crisis.
We have members in Italy, South Korea, China and other severely affected regions sharing their stories about how serious the situation with this virus is. From all my discussions with well-connected individuals, as well as my own in-depth research online (non-mainstream media), I can tell you that this virus is very serious and affects certain people in the community, especially the elderly. It is clear that it poses a risk for generations and people with pre-existing health conditions. A global pandemic as the world is very aware of the dangers of this virus and everyone is preparing for the worst, even though a large portion of the population is at great risk. may end sooner than expected. , touch the tree.
Now is never the time to panic and run for a bunker, but it is time to be vigilant, plan and protect yourself and your loved ones from possible infection (especially those most at risk). older people).
At this stage, I took personal precautions, including self-isolating myself and my family from the outside world. I have been stockpiling food for the last few months as needed (as I speak, local stores are limiting purchases and shelves are mostly empty). I asked my parents and older friends to self-isolate from everyone, including my own family. This is a little concerning as most of my attempts to help my family and friends prepare for potential worst-case scenarios have fallen on deaf ears. But in the end, you can’t control other people.
Q: Why is the market moving like crazy and all is well?
A:
This is the true Black Swan.
Market movements were extreme and unexpected. This is a true black swan (an unexpected and unpredictable event that was very difficult or impossible to predict) that has caused real disruption to global financial markets and economies. This move has been exaggerated by the predictable panic and confusion of the people and, as always, computer algorithms (quants) have ignited the momentum behind many of these crazy daily movements in the market. I have it on.
What should be feared is “fear” itself
Most retail market participants actually believe the world is coming to an end. We know that extreme price volatility causes many market participants to panic and make decisions without even understanding what is really going on in the psychology of a typical trader or investor. Some companies will inevitably be forced to sell to raise margin calls or simply capital to operate their businesses in this depressed economy.
The problem we have here is that panic and overreaction could actually turn out to be the cause of another GFC to rival the coronavirus crisis itself. Fear of owning assets, fear of leaving any form of travel or leaving home will lead to a self-fulfilling collapse in the global economy, regardless of the true cause. is a real danger, not just for the pandemic itself, but for all of us here.
Given “again” to the rescue
As we saw at the 2008/2009 GFC, the US Federal Reserve has announced a “whatever it takes” bailout to try to stop the bleeding in the financial and credit markets. Countries and central banks around the world are all working together to stimulate their local economies and help local businesses weather the current economic storm. Sadly, these relief tactics don’t help all local businesses, and certainly not all public companies. Bankruptcies and bankruptcies will occur as a result of the current crisis, but the global stock, credit and currency markets have already priced this in.
capitalism continues
History shows that Reserve Banks and governments will not allow markets or economies to collapse. They have saved the world before and will try to save it again, so we should stay optimistic. When that happens, it is hoped that things will begin to stabilize, as they did during the 2008/2009 global financial crisis and other crises in recent history.
Whatever happens now, it is important for all of us to understand that this is not the ‘end of the days’, nor the ‘end of capitalism’, things will eventually continue normally where they left off. It is important to remain optimistic. Because when you get caught up in negative thoughts, 1. your problems get worse and 2. you miss out on huge trading and investment opportunities.
Q: Do you think Trump will be re-elected in 2020?
A:
People have asked me about my thoughts on Trump’s victory in 2020 ever since I predicted that Trump would win the 2016 election and get over 500% returns on that bet/deal. presidential election. As a master at manipulating events to his advantage, Trump will be credited for saving his life and ending the crisis through the efforts of his response team. He applauds the V-shaped stock market recovery that will eventually occur after the pandemic subsides, and his associates at the US Federal Reserve ensure that it happens. With a mass emergence of supporters and new silent supporters, Trump will convincingly claim victory in November 2020. may have the opportunity to endorse Trump. I may write an article about this later in the year.
Q: How are you trading the current market conditions?
A:
Look for opportunities everywhere.
For myself and other experienced traders, there are great opportunities to trade short-term fluctuations and trends in various markets. The last few weeks have seen a number of trading entry opportunities offering high risk/reward payoffs. Gold, the S&P 500, crude oil and all major forex pairs have seen amazing volatility, just to name a few.
A patient trader can either wait to trade swings by monitoring price action signals and identify short-term turning points, or monitor retracements to important levels and use price action signals to generalize. Wait to trade trends by identifying when trend momentum resumes.
For investors, there is a great opportunity to acquire long-term investments in solid companies that have been on their investment shopping list. Professionals do not panic in such situations. They are spitting on the opportunity to profit and are embracing this kind of market conditions.
Give the trade room to move. These are extraordinary times.
During this extreme volatility, it is important for traders to have room to trade. This means using wider stop losses and adjusted position sizes. As an example, you can trade 1 lot instead of 2 while risking the same $ per trade. A wide stop of 400 points instead of 200 points he could also use a loss. Note that a wider stop loss does not mean higher risk if you reduce your position size. Do the math and be aware of the risks.
Take advantage of crazy market conditions and your newfound free time to learn and practice your craft.
If you, like me, plan to work from home or just hang out on the weekends instead of going out to see friends and family over the next few weeks or months, then this newfound free time is for you. should focus on self-education. Study trading approaches and practice your trading strategies in real situations. There’s never been a better time to immerse yourself in the market. An exciting time to learn and an exciting time to trade.
at the end:
Like it or not, a privileged few rule this world, and they’ve ruled this world for a very long time. Financial markets are one of the mechanisms they use to transfer and manage wealth. They don’t stop playing games. The world will go on and businesses and people will return to normal in the not too distant future. It’s always been this way over the past few centuries since capitalism began, and it’s not going to change anytime soon. In the meantime, earn money and take advantage of our wealth of trading and investment opportunities.
What do you think is really happening in the world and markets right now? What have you traded or considered trading? How are you planning for the coming weeks or months? mosquito? Talk to me by leaving a comment below. Reply to all comments.
maintain safe and good transactions,
Niall Fuller
gold coast, australia
March 17, 2020